KWS SAAT AG confirms good expectations for fiscal 2009/2010 (2010-02-25)
Forecast confirmed: Slight rise in net sales – Income on a par with the previous year’s good figure – Strengthening of R&D activities
(Einbeck, February 25, 2010/No. 5/gf) – KWS SAAT AG (ISIN: DE0007074007), one of the leading international seed companies, reaffirms that it will be able to follow up on last year’s outstanding results in the current fiscal year, 2009/2010. The Executive Board is backing up its forecast with reference to the strong performance of the company's varieties – particularly in corn breeding.
As a result of the seasonal nature of its business, the KWS Group’s net sales in the first half of the year usually only account for just under a fifth of the total annual figure and are thus not a final indication of the trend for the year as a whole. In the six months from July to December, net sales were €120.6 (141.8)* million, down around 15% from the previous year.
Better sales opportunities for corn in the current year
Net sales and income from the sugarbeet business were at the level of the previous year. As stated in the report for the first quarter, the drop in prices for cereals for consumption during the fall sowing season resulted in a sharp decline in demand for certified seed for cereals. The performance of the corn segment was impacted by lower rapeseed business and shifts in net sales to the next quarter. However, its income profited from the reversal of allowances for payments that have now been received and for inventories, and from a reduction in internal license costs.
“The sales opportunities for our corn business in the current year have further improved as a result of our good variety performance and the fact that the liquidity situation of our customers in Southeastern and Eastern Europe is slowly stabilizing,” said Hagen Duenbostel, Chief Financial Officer of KWS SAAT AG, about the outlook for the year as a whole.
Research and development as a driver of future growth
To secure future growth and build on its good market position, KWS has significantly strengthened research and development activities in the core segment of breeding and services and has again made large investments. This is also reflected in the size of the workforce of the KWS Group, which will likely grow to more than 3,400 (3,215) by the end of the fiscal year.
Operating income (EBIT) was € –52.1 (–39.9) million, reflecting the strategic expansion of R&D activities and the drop in contribution margins from cereals and rapeseed business. “On the other hand, the level of payments received and early orders by our customers were good, enabling us to reverse allowances for receivables and inventories,” noted Duenbostel in discussing the company’s earnings performance. Net financial income/expenses improved to € –0.9 (–2.2) million as a result of the currently low level of interest. Income after taxes at December 31, 2009, was € –39.3 (–30.2) million.
KWS continuing its growth
The Executive Board expects net sales at the KWS Group to rise slightly in the current fiscal year and earnings strength to remain at the same level. The corn business will remain the segment with the strongest growth.
Contact:
Georg Folttmann
Phone: +49 (0)55 61 / 311-640
g.folttmann@kws.com
* The figures in parentheses are those for the previous year
